Budget 2015: Will Real Estate see a return to Achche Din, Mr. FM?

Even as the FM Arun Jaitley gives the final touches to his maiden Union Budget for 2015-16, the country’s real estate industry is waiting with bated breath to know what lies in store for them and whether it will translate into the return of the promised ‘achche din’, for the realty domain that is witnessing some turbulent times over the last few quarters.

So what are the major demands and expectations from the industry from the budget? Is it to grant industry status to the realty trade to attract FDI, or grant higher tax rebates for home buyers to boost property sales?

Should the FM consider lowering interest rates on borrowed funds and also simplify the norms for buying land, or focus on initiating a single-window clearance system to end the long wait for project approvals?

The list is endless and the expectations sky-high. We asked a few leading developers and industry experts for their Budget wish list for the FM, and this is what they had to say:


Mr Kamal Khetan, CMD, Sunteck Realty Ltd.
I believe speeding up infrastructural development should be the primary focus of the government in this budget. Infrastructure is important when it comes to making real estate development viable across new and established micro markets that have witnessed stagnation on account of an infrastructure deadlock.

Easing the interest rates will also have a positive impact on the industry since it would increase liquidity in the economy thereby benefiting the industry. A cut in the interest rate on home loans would further encourage buyers with disposable incomes to invest in property. We also need a single window clearance system to ensure a speedy completion of stalled projects that are presently awaiting various clearances.

There is also a need for clearer and loop-hole free policies to ensure a faster and more transparent execution. Frequent changes in policies and regulations hurt the industry. Lastly, macro investment initiatives are the need of the hour to boost REIT’S and FDI that can encourage and foster development and usher in a demand and supply balance.

(About Sunteck Realty Ltd: SRL is a Mumbai-based real estate development company catering to the luxury and ultra-luxury residential segment, with a city-centric development portfolio of approx 25 million sq. ft., spread across 24 projects at various stages of development.)


Mr Mehul Thakur, Director, Viva Homes.
To enhance the growth of the sector, it is imperative to introduce policies and incentives that will boost the sector in the Union Budget. Starting with support to incentivize affordable housing and permit higher tax exemption limits for home buyers, we have great expectations from this budget. The government should also focus on granting a separate industry status to the real estate industry. This will help boost domestic bank lending, increase Foreign Direct Investment into the sector and ease external commercial borrowing.
Single window clearances for the real estate sector will also help in curbing costs and therefore, significantly boost the affordable housing market.  Another focus for the government for 2015-16 should be revising the current FSI rules for ensuring a better vertical growth of the city.

(About Viva Homes: A leading developer in north Mumbai, the company has been one of the key players behind the development of the city’s Vasai-Virar region, with a focus on building value-for-money homes in the affordable homes category.)

Mr Rajesh Prajapati, MD, Prajapati Constructions Ltd.
There is an urgent need for the new government to focus on growth oriented policies for the real estate sector in the country. Key measures that are needed include: giving industry status to the real estate industry, reducing home loan interest rates, removing or reducing service tax substantially, income tax exemption for affordable homes built for EWS and LIG, borrowing for construction companies at lower interest rates.
Giving industry status will attract huge FDI into the realty sector and increase funding options for developers. This in turn will ensure faster completion of projects, thereby reducing project costs for both the developer and buyers. Reducing home loan rates will encourage buyers to buy property, while a decrease in the service tax will reduce the already heavy tax burden on them.   

The key areas that government needs to focus on would be providing finance to the housing industry at a lower cost and creating an atmosphere for faster project approvals.  Last but not the least, land buying norms should be simplified since it is the primary raw material for our industry.

(About Prajapati Constructions Ltd: The flagship company of Prajapati Group, PCL specialises in premium affordable housing projects with a strong presence across Navi Mumbai and Hyderabad. The Group has completed over 20 projects in Navi Mumbai and Hyderabad, encompassing over 1 million sq.ft of space and 1500 units of residential and commercial space delivered.)


Mr. Anuj Puri, Chairman and Country Head, Jones Lang LaSalle.
The Union Budget needs to provide tax incentives for renting out residential properties. This will help boost rental supply especially in the metros. Enabling faster project approvals will also shore up the supply, thereby helping to reduce prices and ensure that realty remains a viable business.
Approving the long pending Real Estate Regulatory Bill (RERA) is another key requirement to make domestic realty market attractive to foreign investors.

The budget also needs to present a workable and streamlined LARR Act, with significant relaxation in the currently tedious rehabilitation clauses and other norms. Stakeholders of the residential real estate sector in India definitely need greater encouragement to go green. The new government has the opportunity of making Indian real estate more investment-friendly and attractive by introducing a revised tax code.

Lastly, India is still an infrastructure deficient country and needs large investments to help bridge the infra gap. The Union Budget should make more provisions to increase foreign investors’ participation in this sector.


Mr Rohit Gera, MD, Gera Developments, Pune.
On an overall level the country is crying for new reforms and a fresh impetus towards growth. As far as the SEZ policy is concerned, it has been diluted by the previous Government and needs to be reinstated so as to give a stimulus to the SEZ development.

With regards to the real estate industry, there is a need to promote and increase the supply of housing stock and simultaneously stimulate demand which can be achieved by offering time bound project level incentives and special interest deductions for first time buyers.

(About Gera Developments: One of Pune’s leading developers Gera Developments has spread their footprint across Pune, Goa and Bangalore by constructing and delivering over 50 projects, with close to 4 million sq.ft. of development.)

Mr Hariprakash Pandey, Vice President, Finance and Investor Relations, HDIL.
We expect that this Budget will be growth-oriented, will fuel investments and through reform measures and stable taxation policies, will facilitate the ease of doing business in India.
The granting of infrastructure status to the industry and a single window clearance mechanism are two of our long pending demands. These would enable easy flow of funds to the sector and fast track the approval process thereby enabling removal of impediments to the growth of the real estate sector. We also expect a further impetus for the affordable housing sector in this budget.

A formal announcement of implementation of GST (Goods and Services Tax) will be a key booster for the overall economy.”

(About HDIL: With a land reserve of 244.09 million square feet as on 31st December 2014, Mumbai-based Housing Development and Infrastructure Limited, has about three decades of experience in the realty and infra domain, having developed over 100 million sq. ft. area of commercial, residential and retail space. The company has 90 percent land reserves in the Mumbai Metropolitan Region (MMR) and is a leading player in residential and SRA projects.)